Currency dilemma

I keep seeing references to 'trickles' and 'floods' of returnees, particularly pensioners, to the UK on this and other forums, but invariably they are quoting from such publications as the Daily Mail.

Is is really happening? Or is it just a case of media hype and 'Never let the truth get in the way of a good story'

Normansands; if your friends in Benidorm feel their pensions cant cope with parity how the hell are they going to cope back in the UK?

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Dear All,

it is unfortunate when enthusiasms attempt to disbar the facts by various exaggerations of one kind or another.

It was posted that a trickle of returnees has become a stream but not yet a flood.

If that is incorrect then by all means post the contrary facts to disprove it.

I note from the poster's profile that foxbat is only semi-retired, he does not say, but perhaps he has some sort of income independent of £'s that is not suffering from the £'s catastrophic decline.

Perhaps his finances are truly independent of the currency dilemma, perhaps even he does not believe there is a dilemma at all?

Lucky him!

I am happy to declare all information but the Xmas card provided no more for me to reveal, but I believe it to be genuine otherwise I would not have posted it. If any more facts emerge I will post them promptly.

I have no knowledge of where newspapers trawl their information from, sorry.

Regards

Norman

Quote...I note from the poster's profile that foxbat is only semi-retired, he does not say, but perhaps he has some sort of income independent of £'s that is not suffering from the £'s catastrophic decline.

Perhaps his finances are truly independent of the currency dilemma, perhaps even he does not believe there is a dilemma at all?

Lucky him!...Unquote

Really must update my profile...Fully retired and pension dependent I'm afraid.

See thread about transferring money to Spain...

August -pensions totalled just over 1700 Euros when converted from sterling

Now worth about 1300 Euros...

The only advantage I have over some is that I dont have a mortgage...

I certainly couldn't go back to the UK on £1300 a month...

I am a new invester and have read all the comments on this forum I bought 2 off plan propertys over a year ago they should of been ready dec 08 they now tell me june 09 I am thinking now the longer the better as the euro has taken such a large fall since I put my deposits down at 1.45 I have now decided to ride the storm out I dont have to pay another penny until I get the keys I was originally going to pay for 1 property and have a mogage on the other but since the down turn I am now thinking of trying to get morgages on both propertys wait for the market to recover then transfer all money over to pay for propertys does this make sence I have a well payed job in the uk so hopefully this will convince the banks of my financial postion if anybody has any comments for me feel free to let me know?????

Hi have to agree with fb, if it is true expats are returning I hate to think how they are going to manage, unless they still have property in UK which sounds unlikely.

We go over to Spain 2 or 3 months at a time and find it much cheaper than UK. We can also afford to eat out which we do not seem to do very much in  UK. as it is so expensive.

I agree if you are a invester than you probably will loose out the way things are going and it certainly is not going to improve for quite a while, but as we have said so many times before if like us you are using it as a holiday home and not wanting to sell for a quick return then you should be fine.

I do feel sorry for the older pensioners that have been in Spain when things were really cheap and now are feeling the pinch. But they will be a lot worse of back in UK unless they get help from  G B our prime minister, that should be interesting.

Well that is my opinion for what it is worth.            Pat.                      

Dear All,

there is an immense amount of hope being shown by many people that things will improve, given sufficient time.

Some even seem to think that the £ will recover it's old value against the euro, but give no reason except that some sort of  cycle or roundabout system is in operation.

A historical cycle perhaps?               Something that the experts have all seen before??????

Can this possibly be true?         Can the City whizz-kids save us? 

Has GB really got it all under control?

We, like our friends hope so, but I for one am extremely reluctant to bet on it, even with small stakes that would not be a huge loss.

As to taking out large euro mortgages, I consider that would a speculation much, much, much too far.

It seems to me that the £'s slide is not yet over and I personally do not predict any cycle coming to the rescue.

As to Spanish property agents, I will never again believe even 10% of what they say.

But I am happy to be proved wrong.

Good luck in whatever decisions you make.

Regards

Norman

"However with the £'s weakness and the high Spanish mortgage rate 6+%, British buyers and indeed holiday makers are going to be very thin on the ground."

I have already mentioned the fact that Spanish Mortgages follow the Euribor rate plus a percentile of 1 to 1.25. The current Euribor rate is 3.150 which means any Spanish Mortgage taken out today would be 4.15% or 4.40% which is the same rate, if not a little lower, than what UK Banks are offering UK borrowers! Also said Mortgages are reviewed every six months and set at the reviewed rate for a period of six months.

As for Spanish Mortgages being expensive you said "Legal and tax costs are very high as are agents commissions."

Well, the Agents’ commissions are paid for by the Vendor not the Purchaser and in the UK ANY property above £250,000 then you have Stamp Duty. Also don't forget in the UK you have costs with Valuation Fee, Booking Fee, Completion Fee, Arrangement Fee and a Service Fee. Oh and don't forget your Solicitors fees.

Thus as I said in previous posts, in this thread and others, that now IS a good time to buy if you are interested in long term investment, either as a new home or a holiday home. These statements that I make are not that of an expert in financial or property markets, as I am neither, however they seem to be borne out by such experts in both fields, as you may have read below and in other threads, as my statements are based on actual facts.

I am not stating that I know all the right answers, indeed I am not saying my answers are correct, however they are based on FACTS and not SPECULATIONS made in Newspapers and TV News Stories, who seem hell bent on saying "If you think it's bad here in the UK, its worse on the Spanish Costas".

Well keeping this thread on topic, things are bad here, but they are far worse back in the UK and ANY pensioner who lives here in Spain is much better off than they would be in the UK, and that is a statement of fact looking at the facts, even if Sterling does reach parity with the Euro, a Euro goes much father here than a pound goes in the UK.

For example my electricity bill for the previous two months was 60€ but I expect that to double for this month and the next due to the fact it is Winter and also we have a load of Christmas Lights put up, however when we get into Spring my Electricity bills will revert to about 30 - 40€ per month, whereas in the UK we were paying £60 per month.

When you look at the facts, regardless if you are an expert or not, you will see that the cost of living is lower here in Spain than in the UK, and the standard of life is far superior. I would love to hear from ex-pats that have now gone back to the UK and been there a few months! I'm sure that unless they are on the dole and have scrounged a house of the state, that they will be wondering if the move back to the UK was such a good move.

If you take a look at your average pensioner in the UK, they find it very difficult to make the expensive fuel and electricity bills, leave alone eat. As far as eating out is concerned then forget it, it doesn't happen. Now on the other hand the same pensioners that have moved to Spain now find it difficult to eat out more than twice a week, I don't hear them moaning about their fuel and electricity bills and trying to pay these and put food on the table.

Remember I have only just moved from the UK to Spain, and am finding my UK source of income go much further here than it ever did in the UK. So when it comes to 'who is an expert' on such matters, who is more the expert, the person in the UK thinking about life in Spain, or the person who has just left the UK behind and has started a new life in Spain?

PS. The property we now live in was our SECOND purchase here in Spain, and we have never fallen foul of unscrupulous property agents or property vendors, as I did my research BEFORE we purchased on both occasions.

Aside of the people who purchased 2 or 3 off plans units in the "belief" of being able to sell and get their one free! The next largest group .........in my opinion are those who bought for the combination of

a) useage

b) profit

What true investors look at are

roi-return on investment and yield-the yield ideally being per annum higher than they could achieve in a bank or building society wit the added potential of an overal gain when they sell the property.

However putting aside all tax issues and legal tax avoidances for now the largest thing that they seem to forget or not take into consideration is their useage example being;

I take the wife and two boys (20&14) to my place in Spain for 2 weeks in August-cost to me circa 2,000e

I take them somewhere else for 2 weeks in August cost to me circa 4,000e or equivalent thus the 2,000e albeit a "paper saving" should be taken into account.

As with a lot of comments on this thread there is and has ot be a great amount of generalisation when referring to the cost of living as I know full well living in London that it is far more expensive for me than it would be to live in Scotland (wife is scottish).

When i set up a psnaish mortgage company a fair few years ago I paid for a mori poll and Spain registered circa 45% with the nearest being France at 12% the main reasons being;

a) ease of access-this included flights, flight time, drive time etc etc

b) cost of flights

c) english languange spoken

d) sunshine

though not necessarily in that order, the facts are currently

a) still unbeatable -on par mind with France -but then most for some reason dont like the french!

b) whilst more flights etc will become available to newer destinations the flight time will never ever decrease as although the technology in fuel etc is there, the cost to a passenger would become prohibitive.

c) still holds good

d) still holds good

10% of the uk retire abroad each year and Spain is stil the nmost popular destination

Cost wise, as soemone who under regulation has to check affordability etc I can guarantee that living in Spain is still far cheaper than living in the UK and this fact will remain constant even if parity does happen.

right off to attempt to smack a golf ball in a straight line-unlikely to happen due to vast quantities of alcohol-but it was that or take the wife to the sales!

Happy New Year to all-hope you have a bit of sun as today it is brass monkeys over here!

This whole thread seems to be split between those buying as an investment and those buying for a home/retirement/holidays.

Those buying for an investment will find it difficult now unless they are able to find a UK buyer in pounds.  Houses in the 150K euros area have dropped to about 110K or less.  If you are selling in pounds you will probably get your money back.  If you bought in euros and are selling in euros you will take a loss if you bought in the last 3 or 4 years.  For example, my holiday home 6 years ago cost £70,000 (including taxes etc).  Was up for sale at €130,000 euros a while back (about £98,000) but I have a buyer now at €100,000 (about £98,000) so I'm alright on the pound front.  On the other hand, my new house had a mortgage of €60,000 which was about £42,000.  Unfortunately ,that €60,000 is now nearer £60,000 so what I made on one I lost on the other.  I am not paying the mortgage off just yet as I am hoping the pound recovers in the Springtime (if any of us knew which way the currency markets were going we would all be in our luxury villas with the profits we made).

Cost of living in Spain has gone up if you only have a UK income  (pension or whatever) to rely on.  I reckon that prices on the markets for fruit, veg etc is now more expensive than UK.  Other items, household goods, electricals and so forth, have also been higher in Spain and are now more so if you are stuck with a UK income.  A weeks shopping (like for like not brand for brand) is now more expensive in Spain.  Eating out is still reasonable in Spain providing you stick to the lower end of the restaurant market.  In UK it is still an expensive way to go and I reckon we eat out 2 or 3 times a week in Spain but probably less than once a month in UK.  As an example, 4 cornish pasties, 2 teas and 2 coffees cost me £12.37 today in a Bakers Oven in UK.  Alcohol, always a cheap staple in Spain, is no longer a third of the price in UK but more like two thirds.  This is a combination of prices going up in Spain (I reckon by about 100% in the last 4 years) plus the pound crashing.

The flight times and relatively cheap cost of flights (I have booked for February at £83.00 return for two of us, would have been cheaper but are taking suitcases to bring stuff across to Spain which is around a quarter of the cost) and the number of flights available.  It is cheaper to fly from London to Spain than it is from London to Glasgow, for example.  Flights to Paris are about the same as those to Alicante or Palma.

Australia and New Zealand are the preferred places for Brits leaving the country for good (around 2% of the UK population now lives in those two countries).  Spain is second but not even close with about half the number of those living in Australia and New Zealand.  Spain is closely followed by the USA and Canada with France only having about a third of those living in the USA and only a quarter of those living in Spain.

For home ownership for Brits, however, Spain is far and away the highest.  I suppose it would be a bit difficult to have a holiday home in Melbourne!  The number of holiday homes in Florida is less than a quarter of those in Spain, again due to the proximity, I suppose.

It's been reported that Spain is losing out on tourist bookings this year and lagging behind the extra holiday bookings to places such as Turkey and Egypt which are outside the eurozone.  It is worth pointing out, however, that the number of holidays booked for Majorca alone in summer 2009 outnumbers the total bookings to Turkey and Egypt.  Yes, Spain is seeing a downturn but the sheer numbers sticking to Spain will mean a lot of Brits would have to choose elsewhere to make the numbers even approach parity.  Holiday firms also report a 27% increase in costs next year to Turkey whereas the Spain Costas are only showing a rise of 3%  in costs.  Spain has far more facilities and rooms available to UK tourists than any other country in, or out of, Europe.

Those of you who already have their homes in the sun, best of luck and keep enjoying them.  Hopefully the pound will recover but the reasons you moved there are still valid.  The climate, the people, the better way of life.  Like other posters, I would love to hear from people who have bailed out and moved back to UK just to see if they feel they have made the right move.

Initially, Markfish started this thread when he posted a query about exchanging currency - then Normansands threw a few spanners in the works with some not really "currency" related questions such as:

"On the planning side how is it possible for a developer to change the plans after sales are made and the complex have extra blocks built, pools and gardens reduced?

As to the legal side, that is astonishing, how is it possible to buy a share in a highest luxury, front-line golf, closed holiday complex with every possible holiday facility and yet end up with an undersized very basic poorly built (failed survey) "affordable" apartment with nothing else except a splash pool on an open public urban situation?

What manner of contract allows this and is accepted by your expensive lawyer."

I think that, we on this forum, as a mere drop in the ocean of people who have bought property in Spain, tend to sometimes forget that it's not only the British who have bought and/or live in property in Spain!!  We will not be the end of the spanish economy and/or property market if we stop buying property/living there!  And all UK pensioners who live in Spain will not rush back to live in the UK due to the current exchange rate! Because, wouldn't it figure that, if they have bought property to retire in there, and have no liabilities in the UK, why would/how could they rush back there due to the current currency trends????  They live in Spain now!!  Didn't they plan for that??

I can honestly say, that, for us, the exchange rate is a bonus at the moment - and I am sure there are thousands of others who have invested in Spain who feel the same way!

And Normansands, no offence, but you undoubtedly already have your answers, as every single post in response to your queries you don't agree with or pick holes in!  If you want "professional" advice, then there are many professionals out there who can give it to you, for a price no doubt.  If you want advice from those who "have done it, been there already", then you have received it.

I can understand people feeling bitter about losing their money/property costing more with the current exchange rate, etc., etc., but at the end of the day, as TechnoApe says, do your homework first and you should be fine!

That obviously excludes those who were just downright conned out of their money or caught up in any corruption due to no fault of their own.  But that really didn't impact on the exchange rate, did it?

Personally, I am now very happy that the exchange rate is costing me 50 fils less than it did in the summer!  There is a bigger world out there!!

And, on that note, a very Happy and Prosperous New Year to all on EOS!! 

(edited to correct grammar!!)

Dear All,

if I understood Pitby's posts he lost out badly when buying a holiday home in Spain by the off-plan route, paying some 50% more than planned, due to the euro's movement against the dollar.

As I understand it that situation has eased a little and the £ has since lost against both currencies.

It may be that if the market has been badly affected, as all reports suggest and as some of the early posts stated, then he has payed 50% more for something that has lost some 50% of it's market value.

It may even be that the street value of his property is now less than his mortgage and he is in negative equity.

Clearly the investor has to be extremely cautious in investing outside his currency.

Last week Eurostar was offering below parity and I understand British Airways is doing the same today.

Most commentators suggest that the market in Spain will be depressed for very many years.

As others have said, forget the "investment" and enjoy the weather and lifestyle.

Hopefully 2009 will bring better news for all.

Happy new year everyone.

Regards

Norman 

Normansands; quote

 “Dear All,

 There is an immense amount of hope being shown by many people that things will improve, given sufficient time.

 Some even seem to think that the £ will recover it's old value against the euro, but give no reason except that some sort of cycle or roundabout system is in operation.

 A historical cycle perhaps?              

Something that the experts have all seen before??????

Can this possibly be true?        

Can the City whizz-kids save us?

 Has GB really got it all under control?

 We, like our friends hope so, but I for one am extremely reluctant to bet on it, even with small stakes that would not be a huge loss.” Unquote…

I have to agree with you on this Norman; anyone who thinks that the £ will recover its old value is living in cloud cuckoo land.

 I am a cynic by nature, even something of a conspiracy theorist, but I just get the impression that this whole thing is being very carefully orchestrated; as no less a person than the Queen herself said quote

"Why did nobody notice it? If these things were so large, how come everyone missed them?"

 The short answer is that that we weren’t meant to see it coming. International smoke and mirrors politics managed to hide the build up behind other stories…like the build-up to the presidential elections among other things…It’s a form of economic warfare…

 As for GB having it all under control; he may think he has but his strings are being pulled by the likes of Nick Sarkozy and his strings are being pulled by the IMF.

 If the £ does remain independent then I think it may well settle eventually slightly above it’s current level. As for Britain joining the Euro I’ve read somewhere that Britain already owes too much to be considered for adoption to the Eurostates…

Technoape;

 Curious about your electric bills out here

Given that Endesa-Sevillana’s standing charge is 20 Euros per two month accounting period they seem very low; we use electricity for background heating and aircon, lighting and oven cooking. For reasons I won’t go into here we were charged only the standing charge for the first eighteen months of our occupancy and then in July they finally caught up with us and sent us a bill for 1700 Euros. We paid this and then they forgot about us again; didn’t send out a bill or make any D/D demands on our bank account until in November they took three payments in as many days totalling a further 600 Euros. Our account is now straight! Averaging things out over the two years we have actually been in the property it runs out about 100 Euros a month.

Of course had the exchange rate not plummeted the way it has this would have equated to around £65-£70 a month; pretty much what we expected, now of course that 100 Euros equates to £100; yet another reason for tightening our belts.

I should point out that we do live in the campo and half way up a mountain so the summers are incredibly hot and the winters very cold but we knew this when we started out.

Life in General

 We do a once a week shopping trip into Granada and our food bills run out to around 130 Euros each trip. Again this used to equate to around £80-£90 but now is £130.

 We don’t eat out at all except for special occasions birthdays and the like although we might just make an exception on New Years Eve and take a run into Granada for the evening.

 It’s things like these that make life difficult for those on fixed sterling incomes out here and the fact that the rate of change of the exchange rate has been so rapid.

So in some respects expenses here now are not that much different from the UK.

I think most retired people out here, like us, burned their bridges in the UK to come here and thus have no property in the UK to return to even if they wanted to. I speak for both of us when I say that there is no way that we would ever consider going back though; even if we came up on the lottery (lol).

Britain under the present or any near future regime is a totally lost cause and anyone who thinks otherwise should take a course in reading between the lines.

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I think most retired people out here, like us, burned their bridges in the UK to come here and thus have no property in the UK to return to even if they wanted to. I speak for both of us when I say that there is no way that we would ever consider going back though; even if we came up on the lottery (lol).

Foxbat you bring up an interesting point which I don't think has been discussed yet. Living in Spain is wonderful while your health is good but the fact that you've retired to Spain means your older and at some point your health declines and it comes to the point where you;re going to need help. If you've spent your retirement living in an English bubble (something I understand) what do you do. Health care for seniors (hate that term) is based on the idea that your kids will care for you until you can get into a home, and as I far as I can tell there are no old age homes exclusive to English speakers. At that point you're going have to move back to the UK. Way off track but heck that's what makes boards like this so interesting.

As well why is the default font so frigging small!!!! Don't know about you but my eyes aren't like they used to be

Edit: the wife and I did discuss it and when we reach that point we will move back home (canada)

Rob Hi!

Living in an English bubble doesnt really apply to us!

In our village there are just three English couples and we each maintain our typically Brit insularity.

Whilst I have legally reached the European retirement age this only came about in August this year...just in time for the collapse of sterling!

As for health care, when you take on the Spanish system under the European arrangements you give up all rights to UK healthcare under the NHS and as I understand the situation at the moment trying to get back into the system is being made increasingly difficult by the current regime.

My wife hasn't adopted the Spanish Healthcare system yet and so is able to visit her UK medic when she goes back to see her kids, the argument being that as a working woman she contributed to the UK system until we moved here and has the right to use what she paid for.

Obviously at some point the situation may arise where one or both of us have to seriously consider Spanish or UK healthcare; at the moment its very much a case of  'we'll face that if and when we have to' 

We dont have any property in the UK to return to, so we would have to apply to get some form of subsidised housing and the UK's governments treatment of the elderly is unsympathetic at best. 

At  least out here we have a home.

As I said before somewhere, 'kicking and screaming' is the only way that I would return.

btw, my eyesight is fine but I can take a hint...

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I know this is unrelated to Currency dilemma but it is in reply to the last post.

I have been here 6 and a bit years and was admitted to a Spanish hospital ( under the Spanish Health Service NOT private ) as an emergency 3 years ago.

I would NEVER want to choose to use the British NHS again........Spanish health care is FAR better.

I'm going to get old ( older ! ) ..............and I won't want to live with my kids and I'm not keen on a 'home' so wherever I live I'd expect to 'get on with it'........................that's what most of us do, Spanish or English !!

Dear All,

Bank Valuations - my experience was that I paid a considerable sum for two sheets of paper that was based on an assessment, not of value, but of rebuild costs. The property at Casares Del Sol was not built to specification (brochure) and subsequently failed survey.

One fault was that it was undersized yet it was clear that the valuation was based upon brochure size not actual size.

This leads me to believe that the apartment was never actually visited and viewed.

Nevertheless the bank made a mortgage offer based upon it.

I am not therefore convinced that anyone who has bought two properties based on these valuations, even if the price was only 70% of the valuations has made a wise investment.

Given the current 98P euro with the £ still falling against both euro and dollar, if both properties required mortgages then the purchaser is, I suggest, in a very precarious position unless he is an investor with very substantial reserves or income possibilities.

Turning to the other strange thing brought up by this thread - eating out in the UK.

The country's pub system has been totally transformed, they are almost universally providing food of a good standard and reasonable cost. This together with the numerous ethnic restaurants, pizza bars, MacDonald's, fish & chip shops, eateries inside supermarkets etc. etc. means that the whole nation is eating out it seems. Those that are not are having "take-aways" of every description or "ready-meals".

This all in a country that has proper kitchens not "galley kitchens" like a caravan and which is seemingly obsessed with cookbooks, cooking programs and star celebrity chefs by the dozen. The new kitchens now include "ranges" rather than just "cookers" and American style fridges etc. All being bought up in the sales at the moment.

For instance my local pub is a carvery that serves all day, not just lunch time, at £3.45 with a good wine at £6.50.

I certainly do not know any investor, even if on a pension, who cannot eat out should they wish.

Where did this myth come from?

Regards

Norman

norman. if the uk is so good and spain so bad.why did you want a property in spain in the first place.

Yes, the exchange rate hurts all brits unless paid in the eurozone, and I cannot think it will get to 1.20 ever again (and i expect most of us based our sums on 1.40). it would be great if we all had a crystal ball. The biggest cross to bear is mortgages. Do you try to get UK mortgage to repay Spanizh and take a one time hit on rates or continue paying monthly for ever on interest only.

Has everyones situation is different there is no right answer but maybe being in the euro is the right way forward not only on a personal basis (i was the biggest euro sceptic) but also for the global stability as we will have another 18 months of the turmoil.

norman always refers to cds and property prices. Please note in 90% of the world they have dropped 30%, and spain is no different. On a positive side for would be sellers. Your 250,000e property would realise £170,000. Alright now its worth (assuming there is someone out ther and there always is at a price!) say only  150,000e (drop of 40%) which is £140,000 therefore only a decrease of 17%.

Just a few end of year thoughts

noddy

Karensun;

I'm going to get old ( older ! ) ..............and I won't want to live with my kids and I'm not keen on a 'home' so wherever I live I'd expect to 'get on with it'........................that's what most of us do, Spanish or English !!

Hear Hear!

With you 100% on that one...

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Hi all

Two of my children were here in Spain for Christmas Day, so my partner John and I decided that, rather than having to cook and wash up, we would all go out for lunch.  There was no set menu, just the normal carta, so we could all choose exactly what we wanted (another reason for going out, as my daughter and I don't eat meat),  We had an appetiser first, followed by 3 courses, bread, water,  lots of wine, coffees, brandy with our coffees, and then were brought a plate of sweets and half bottle of dulce vino (on the house) with our bill.  The total was 108 euros - I suspect that, even with parity, you would not get that sort of value in the UK on Christmas Day.  The food in this particular restaurant is very good (it's on the Ruta del Vino), which is probably why it was full, with Spanish families there as well.  On the way out, the restaurant manager gave us all a Ruto del Vino badge and wished us Feliz Navidad!

Sue

PS Nothing to do with the vino and brandies, but I left my glasses behind, so the manager of the bar drove their van up the road to catch us up and return my glasses to me!  That is why, although living on UK sterling pensions, we love living in Spain.